The Swiss Franc weakened against the US Dollar on Thursday, with USD/CHF advancing to a two-week peak around 0.8026 as the Greenback surged across major currencies following Federal Reserve Chair Jerome Powell’s hawkish rhetoric and renewed optimism stemming from a breakthrough US-China trade agreement.
The US Dollar Index, which tracks the Greenback’s performance against six major currencies, including the Swiss Franc, surged to 98.53—a three-month high—reflecting broad-based dollar strength following the Federal Reserve’s policy announcement on Wednesday.
While the Fed delivered its second consecutive 25-basis-point rate reduction—lowering the federal funds rate to 3.75%-4%—the market reaction focused less on the cut itself and more on Powell’s hawkish messaging about future policy moves. This divergence between action (cutting rates) and rhetoric (cautious about more cuts) created a supportive environment for the dollar.
The renewed buying interest in the Greenback suggests traders are recalibrating expectations for the Fed’s policy path, moving away from assumptions of automatic rate cuts at every meeting toward a more data-dependent, cautious approach that could keep rates elevated longer than previously anticipated.
“The level of the Franc is not important in itself, only its effect on inflation. We are prepared to intervene in the currency market when necessary and would reintroduce negative interest rates if required. We know they work.“
— Petra Tschudin, SNB Governing Board Member
